SMALL AND LARGE BUSINESSES

Small and Large Businesses

[Date of Submission]

Introduction3

Discussion3

The Current Economic Climate in the United Kingdom3

The Effects of the Current Economic Climate on Small & Large Business4

The Strategies/Skills Used by Small and Large Businesses6

The John Kay Model7

The Styles of Management Used by Small and Large Businesses8

Conclusion11

Small and Large Businesses

Introduction

As an economy goes through contraction and expansion, in with the business and economic cycle, economic conditions change over time. When an economy is contracting, the economic conditions are considered to be negative or adverse, and are considered to be positive or sound when an economy is expanding (Stigler, 1973, pp. 160). Numerous microeconomic and macroeconomic factors, like, inflation, exchange rates, productivity, unemployment levels, the state of the global economy, fiscal and monetary policy, influences the economic conditions of a country.

Measure by nominal GDP, the economy of the United Kingdom is the 3rd largest in Europe and 6th largest national economy in the world (Holman & Et.al, 2005, pp. 9). In terms of household income on an international scale, the United Kingdom dropped from fifth place to twelfth place, over the 6 year period between the year of 2005 and year of 200, in accordance to the report released by the Office of National Statistics of the year 2013.

Discussion

The Current Economic Climate in the United Kingdom

Stagnant growth and high unemployment are the main problem faced by the economy of the United Kingdom currently. A double-dip recession has been suggested by the UK economy that over 3, years has been contracting (Lorenzoni & Et.al, 2007, pp. 445). Over the bleak prospects for the domestic economy and the on-going sovereign debt crisis in Euro, in the face of uncertainty, investment activity is mainly put on hold. The inflation is expected to fall below two per cent target and has felt to 2.4 per cent. It becomes much more difficult for the government to reduce the burden of government debt to GDP, with falling GDP (Michaelas & Et.al, 1999, pp.113).

The debt to GDP ratio is forecast to keep rising, despite austerity measures. Lower living standards and a fall in real wages have been contributed by the stagnant economic growth. Due to the slowdown in economic growth, since the year of 2008, there has been a sharp rise in unemployment. These were the different economic problems that were affected adversely by low economic growth. Negative output gap, subdued investment and modest spending, are many of the problems of the United Kingdom, due to domestic factors. However, external factors are a potential problem as trade with other countries is realized by the United Kingdom.

The UK exports and confidence are facing adverse impact by the economic uncertainty and the continued recession in the Eurozone. Making UK recovery difficult, the serious concern is that a large drag on the UK economy can take place if the Eurozone recession continues to deepen.

The Effects of the Current Economic Climate on Small & Large Business

Net worth, receipts or annual sales, value of products, number of employees, relative size within industry, total ...